The Federal Reserve Bank of New York said the New York-New Jersey regional economy will recover from Sandy by early 2013, but places like the Rockaways, Long Beach and parts of the Jersey Shore will need months and months more to bounce back.
“The particularly hard-hit communities — individuals and businesses there — face a long road to recovery,” said Jason Bram, a senior economist at the bank.
As towns and neighborhoods along the coast salvage and rebuild, small businesses face challenges securing lines of credit, Small Business Administration loans and short-term financing, according to an analysis by the bank’s outreach team.
Construction firms are having a hard time finding financing to replace equipment, and all affected businesses face stiff competition when applying for short-term loan programs.
“These are first-come, first-served programs,” said Claire Kramer, a community affairs specialist at the New York Fed. “The earlier you get into the application process, the faster you’re able to get a decision and to get funds.”
Many local organizations and companies are offering short-term loans with low interest rates, according to a briefing at the New York Fed Wednesday.
New York City’s Department of Small Business Services, Goldman Sachs, and the New York Bankers Association are offering up $15 million in emergency loans.
Through the program, small businesses crippled by Sandy are eligible for loans up to $25,000. They are interest-free for the first six months and carry a one percent rate for the following two years.
The New York Business Development Corporation and NYC Business Solutions are administering the loans.
The agency is also providing information on a matching grant program, federal aid programs, sales taxes exemptions and other disaster relief.
In New Jersey, the Hudson County Economic Development Corporation hopes to announce a short-term loan program for small businesses affected by Sandy as early as Monday.
While the details have not been finalized, the group’s executive director Bette Spinelli said HCEDC plans to offer loans of between $5,000 and $25,000 to be paid back at a two percent interest rate over three years.
Spinelli has received calls about grants, which HCEDC does not have the means to offer. She said she hopes to extend loans to 10 to 12 businesses.
“There’s no panacea. There’s no big umbrella that’s ever going to serve everyone,” Spinelli said in an interview. “We’re certainly not looking to do that. We’re just looking to offer something that might bring some businesses back into full use.”
With the Associated Press